County moves forward with Seven Falls lawsuit

Published: Thursday, March 14, 2013 at 4:30 a.m.

Last Modified: Wednesday, March 13, 2013 at 6:46 p.m.

Henderson County will likely file a civil complaint in Superior Court early next week, since Seven Falls property owners failed to agree on how the county should move forward with $6 million in bond proceeds by Wednesday’s deadline.

County Attorney Russ Burrell said the lawsuit will seek a declaratory judgment on how the county should spend the money it won from a bond company that insured infrastructure at the failed Seven Falls golf community near Etowah.

The county had given parties with interests at Seven Falls — including 58 lot owners, banks, lienholders, developer Keith Vinson and regulatory agencies — until March 13 to agree on a course of action or the county would ask a court to intervene.

“I’ve been contacted by a few property owners and lenders, but nothing in terms of, ‘Yes, we have an agreement,’” Burrell said Wednesday.

Roughly 120 Seven Falls landowners will be served as part of the lawsuit, Burrell said, which is designed to shield the county from liability by having a court-sanctioned action plan for the neglected and eroded property, once touted as a golf mecca endorsed by Arnold Palmer.

The county faces $8.44 million in costs to install roads and other infrastructure at Seven Falls, about $2.5 million more than it recovered from the surety bond. That includes up to $1.13 million in stream mitigation the U.S. Army Corps would require in order to permit road culverts.

“I don’t want either the Corps or the property owners to sue the county because they feel they didn’t get the best and most out of that $6 million (in bond proceeds),” Burrell said. “We hope to avoid all that by asking the court to tell us what the proper and lawful course should be.”

The Corps will not be named as a party in the lawsuit, Burrell said, since they don’t have a direct claim against the bond proceeds. But they will be invited to participate, perhaps even called as a witness.

“When we file the lawsuit, the first thing I’ll do is ask the court for permission — on an emergency basis — to do stabilization work to keep (erosion) from making a bigger mess than it already has,” Burrell said, including seeding slopes and cleaning out sediment traps.

That’s music to the ears of David Weintraub, executive director of the Environmental and Conservation Organization, whose members have asked county commissioners to repair sediment-choked streams with portions of the bond proceeds.

“At least we’ve found common ground on what the first steps are,” he said. “Stopping the bleeding is a worthy first goal, but we also believe that they have a responsibility to fix and restore the damage that’s been done to the land and streams before they begin building infrastructure.”

County officials have said the bond proceeds must be used to install roads, water and sewer, not repair streams. But Weintraub said without some stream restoration, the Corps likely won’t issue road culvert permits necessary to provide access for workers installing utilities.

The ideal situation, Weintraub said, would be for the county to buy out willing Seven Falls landowners “and perhaps sell the land to a white knight developer who would put a bunch of land into a conservation easement and use some of the money to do restoration.”

Mary Sciupider is one Seven Falls property owner who would take that offer. She said the best thing the county could do with its $6 million is divvy it up among the property owners.

In 2008, she and her husband Dave spent $270,000 for their lot at Seven Falls; it’s now valued by the county at $27,000. The couple has already spent $100,000 trying to recover their investment, she said.

“I would love to have my money back,” she said. “It’s like a house of cards has fallen.”

<p>Henderson County will likely file a civil complaint in Superior Court early next week, since Seven Falls property owners failed to agree on how the county should move forward with $6 million in bond proceeds by Wednesday's deadline.</p><p>County Attorney Russ Burrell said the lawsuit will seek a declaratory judgment on how the county should spend the money it won from a bond company that insured infrastructure at the failed Seven Falls golf community near Etowah.</p><p>The county had given parties with interests at Seven Falls — including 58 lot owners, banks, lienholders, developer Keith Vinson and regulatory agencies — until March 13 to agree on a course of action or the county would ask a court to intervene.</p><p>“I've been contacted by a few property owners and lenders, but nothing in terms of, 'Yes, we have an agreement,'” Burrell said Wednesday. </p><p>Roughly 120 Seven Falls landowners will be served as part of the lawsuit, Burrell said, which is designed to shield the county from liability by having a court-sanctioned action plan for the neglected and eroded property, once touted as a golf mecca endorsed by Arnold Palmer.</p><p>The county faces $8.44 million in costs to install roads and other infrastructure at Seven Falls, about $2.5 million more than it recovered from the surety bond. That includes up to $1.13 million in stream mitigation the U.S. Army Corps would require in order to permit road culverts.</p><p>“I don't want either the Corps or the property owners to sue the county because they feel they didn't get the best and most out of that $6 million (in bond proceeds),” Burrell said. “We hope to avoid all that by asking the court to tell us what the proper and lawful course should be.”</p><p>The Corps will not be named as a party in the lawsuit, Burrell said, since they don't have a direct claim against the bond proceeds. But they will be invited to participate, perhaps even called as a witness.</p><p>“When we file the lawsuit, the first thing I'll do is ask the court for permission — on an emergency basis — to do stabilization work to keep (erosion) from making a bigger mess than it already has,” Burrell said, including seeding slopes and cleaning out sediment traps.</p><p>That's music to the ears of David Weintraub, executive director of the Environmental and Conservation Organization, whose members have asked county commissioners to repair sediment-choked streams with portions of the bond proceeds.</p><p>“At least we've found common ground on what the first steps are,” he said. “Stopping the bleeding is a worthy first goal, but we also believe that they have a responsibility to fix and restore the damage that's been done to the land and streams before they begin building infrastructure.”</p><p>County officials have said the bond proceeds must be used to install roads, water and sewer, not repair streams. But Weintraub said without some stream restoration, the Corps likely won't issue road culvert permits necessary to provide access for workers installing utilities.</p><p>The ideal situation, Weintraub said, would be for the county to buy out willing Seven Falls landowners “and perhaps sell the land to a white knight developer who would put a bunch of land into a conservation easement and use some of the money to do restoration.”</p><p>Mary Sciupider is one Seven Falls property owner who would take that offer. She said the best thing the county could do with its $6 million is divvy it up among the property owners.</p><p>In 2008, she and her husband Dave spent $270,000 for their lot at Seven Falls; it's now valued by the county at $27,000. The couple has already spent $100,000 trying to recover their investment, she said. </p><p>“I would love to have my money back,” she said. “It's like a house of cards has fallen.” </p><p>Reach Axtell at (828) 694-7860 or than.axtell@blueridgenow.com.</p>